Complete annual report 2010-11 - Land - NSW Government

State Property Authority
Notes to and Forming Part of the Financial Statements
For the Year Ended 30 June 2011
(v) Equity Transfers
The establishment of new statutory bodies or transfer of net assets between agencies as a result of an administrative
restructure, transfers of programs/functions and parts thereof between NSW public sector agencies are designated as a
contribution by owners and recognised as an adjustment to Accumulated Funds. This treatment is in accordance with
Treasury Policy and Guidelines Paper TPP 09-3 "Contributions By Owners Made to Wholly-Owned Public Sector Entities"
and is consistent with Interpretation 1038 "Contributions by Owners Made to Wholly-Owned Public Sector Entities" and
Australian Accounting Standards.
Transfers arising from an administrative restructure between government agencies are recognised at the amount at which
the asset was recognised by the transferor government agency immediately prior to the restructure. In most cases this will
approximate fair value. All other equity transfers are recognised at fair value.
(w) Changes in Accounting Policy
Lessor Classification of Long Term Land Leases
NSW Treasury Policy and Guidelines Paper TPP 11-01 "Lessor Classification of Long Term Land Leases" was issued in
February 2011 in response to amendments to AASB 117 "Leases". The amendments to AASB 117 revise the guidance for
classification of long term land leases and is effective for financial years commencing 1 July 2010 (with restatement of
comparatives from 1 July 2009).
Prior to 1 July 2010, all land leases were classified as operating leases. However, the amended AASB 117 and NSW
Treasury policy TPP 11-01, provide updated guidance that some long term land leases should now be classified as finance
leases, where it is determined that the risks and rewards of ownership have been substantially transferred.
The reclassification from operating lease to finance lease has a range of impacts for the Authority, including the
derecognition of land assets and the recognition of finance lease receivables.
In accordance with the transitional provision of AASB 117 (Paragraph 68A), the Authority has reassessed the classification
of land elements of unexpired leases as at 1 July 2009 on the basis of the facts and circumstances existing on that date.
The Authority has also recognised the assets and liabilities related to the reclassified leases at their fair values at that date.
The following adjustments have been made to the Statement of Financial Position as at 1 July 2009:
Statement of Financial Position (Extract) Increase/ Restated
30 June 2009 (Decrease) 1 July 2009
$'000 $'000 $'000
Assets (Extract)
Receivables (Current) 16,188 4,884 21,072
Property, Plant and Equipment 860,151 (34,000) 826,151
Investment Property 39,155 (39,155) -
Receivables (Non-Current) 25,944 68,271 94,215
Liabilities (Extract)
Deferred Income (Current) 3,172 (1,764) 1,408
Deferred Income (Non Current) 165,820 (161,628) 4,192
Net Assets 773,563 163,392 936,955
Equity
Accumulated Funds 761,582 162,892 924,474
Asset Revaluation Reserve 11,981 500 12,481
Total Equity 773,563 163,392 936,955
34
State Property Authority